Despite the tremendous public health and financial burden of cigarette smoking, relatively little is understood about brain mechanisms that subserve smoking behavior. This study investigated the effect of lifetime regular smoking on brain processing in a reward guessing task using functional magnetic resonance imaging and a co-twin control study design in monozygotic (MZ) twin pairs that maximally controls for genetic and family background factors. Young adult (24–34 years) MZ female twin pairs (n = 15 pairs), discordant for regular smoking defined using Centers for Disease Control criteria as having smoked ≥100 cigarettes in their lifetime, were recruited from an ongoing genetic epidemiological longitudinal study of substance use and psychopathology. We applied hypothesis-driven region of interest (ROI) and whole-brain analyses to investigate the effect of regular smoking on reward processing. Reduced response to reward and punishment in regular compared with never-regular smokers was seen in hypothesis-driven ROI analysis of bilateral ventral striatum. Whole-brain analysis identified bilateral reward-processing regions that showed activation differences in response to winning or losing money but no effect of regular smoking; and frontal/parietal regions, predominantly in the right hemisphere, that showed robust effect of regular smoking but no effect of winning or losing money. Altogether, using a study design that maximally controls for group differences, we found that regular smoking had modest effects on striatal reward processing regions but robust effects on cognitive control/attentional systems.